Kenya gets Sh11b loan for power lines

December 10, 2010

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By MICHAEL KARANJA, NAIROBI, Kenya, Dec 10 – The Ministry of Finance has signed a Sh11.8 billion loan agreement with the Japanese Governemnt for the construction of the Olkaria-Lessos-Kisumu power transmission lines.

The project entails the construction of a 220-kilovolt transmission line between Olkaria to Lessos (213 Km) and from Lessos to Kisumu (77Km).

The 290-kilometer transmission line will transmit renewable energy generated in Olkaria ensuring stable supply of power to the Western region.

“The objective of the project is to enhance efficiency, reliability and security of electric power supply in Kenya by constructing higher voltage transmission line systems, thereby creating conducive investment climate and enabling economic growth,” Finance Minister Uhuru Kenyatta said on Friday.

The project will also allow for the power interchange with Uganda ensuring consumers have access to affordable energy.

The Ministry of Energy has previously indicated that it requires Sh40.2 billion to upgrade the country’s aging power transmission system as well non-existent infrastructure.

The funds are required to expand the network, as only 29 percent of the Kenyan population is connected to electricity.

The country has been forced to endure regular power outages owing to the rundown transmission system and insufficient power generation.

The government has already mobilized Sh16 billion for the exercise that is aimed at improving the country’s power quality adding it was seeking investors to help finance other projects.

The Sh40.2 billion investment is expected to boost the per capita consumption of power from 144-kilowatt hours to an estimated 300-kilowatt hours. Kenya currently experiences 600-power blackouts owing to aged power lines.

At the same time, the Japanese Government advanced Kenya a Sh281 million loan for assistance in HIV/AIDS.

Japan has given loans and grants amounting to approximately Sh60 billion in 2010. Among the biggest recipients of Japanese assistance are the Olkaria 1 unit four and five Geothermal Power Project and the Mwea Irrigation Development project.

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MICHAEL KARANJA Michael is a Business Reporter. He is a graduate of Daystar Univeristy with a Degree in Communication (Electronic bias) and a minor in Public Relations. He considers himself easy going and loves engaging